Encyclopedia of Investment Terminology

Dividend

A Dividend is a form of distribution of earnings to stockholders of a company. In other words when a corporation is profitable it may pay some of the profits in the form of a dividend to the company’s stockholders while retaining a portion for re-investment within the company.

A company is not obligated to pay a dividend to its shareholders, but it may choose to pay one at any time. In addition dividends can be regular (scheduled) or special (at any time).